Amazon ad growth could form 'triopoly' with Facebook, Google
Amazon could have a big future in advertising, especially during the holidays, according to a Forrester report emailed to Retail Dive. Per the report, one search marketing agency said its clients already spend about 45% of their yearly Amazon ad budget during the holiday season.
The huge selling point for marketers using Amazon is the company's purchase data, which according to Forrester puts it a notch above Facebook and Google, which themselves account for almost 60% of online advertising.
In years to come, Forrester expects marketers to increasingly turn to the Amazon Advertising Platform, which 44% of ad buyers already use, according to the report.
Amazon has become a powerhouse retailer for holiday shopping — 76% of consumers turned to the e-commerce giant for at least part of their holiday shopping this year, and the company managed to rake in 4 million trials of Prime during just one week. That's not to mention the fact that Amazon had a monster Cyber Monday, with the consumer holiday passing a record for the company's single biggest shopping day ever.
Then there's the fact that Amazon is involved in just about every product space imaginable, with private labels growing like mad in everything from apparel to medication. That's garnered the retailer an ever increasing number of dedicated shoppers and it's hard for marketers to ignore that.
"To date, its advertising business has largely been fueled by CPG marketers looking to create visibility for their products on Amazon.com with search ads," Collin Colburn, the author of the report, wrote. "But going forward, marketers beyond just CPG and retail will want to tap into Amazon's rich data to better target customers through display and video ads across the web."
According to Forrester, that could mean Amazon will pose more of a challenge to Facebook and Google going forward, especially since Amazon has the unique advantage of getting to users that are already close to making a purchase online. That characteristic also led eMarketer in October to suggest the company might reach $3.19 billion in digital ad revenue by 2019, a vast increase from previous years.
It's also led 63% of marketers to increase their Amazon ad budget, as more see promise in Amazon as an advertising platform. Nevertheless, Amazon's continued success in the marketing space may not do much to level the playing field in terms of spend.
"But Amazon may end up just adding a third walled garden to form a 'triopoly' and grow the overall pool of ad dollars rather than taking significant spend away from Google and Facebook," Colburn noted.
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